AA010101.MXF.Still001_R4_CL

What initially drew me to the VC world…

I began my career as an entrepreneur — I started a small business with a sibling after college.  Later, I launched pediatric companies with technology from Children’s Hospitals and learned about the power of venture capital. I was attracted to its capability to finance innovative solutions to big problems, but I also saw its limitations. It presented a great opportunity for change.

My proudest accomplishment co-founding and leading the Kauffman Fellows Program…

There are two things that stand out. First, 170 venture funds have been created by Kauffman Fellows, all with a unique respect for the entrepreneur, as well as the wealth created. It has become a virtual accelerator of innovative and successful VC firms around the globe that have an immeasurable impact on the world economy. Second, Kauffman Fellows are the model of diversity and meritocracy, and for over 20 years have been the most effective force for diversity in the VC world. Over one-third of Kauffman Fellows are women (in an industry with about 5% women) and 25% are traditionally disenfranchised minorities. There is still more work to be done.

Portfolia is…

An entrepreneurial investing platform designed for women. It creates diversified ‘portfolias’ of innovative companies for one annual investment and provides an engaging and collaborative investing experience. In short, it makes investing fun and financially rewarding.

How my experience at Kauffman inspired me to start Portfolia…

My experience in building Kauffman Fellows gave me a unique understanding of the VC industry. I had a behind-the-scenes view, evaluating the success factors and strategies of literally hundreds of the world’s top VCs, so that we could prepare the next generation of leaders. I was able to see the incredible strengths, and also the weaknesses in the investing process – the homogeneity of backgrounds, education and views of VCs and a tendency to depend on past patterns of success rather than tease out the new mosaic of the future. The industry has not been able to diversify or really innovate its model, even as women earned top degrees, began building companies and moved to full ownership of wealth. I knew I had the knowledge, expertise and networks to deconstruct traditional venture capital investing in order to design a better alternative for women who want to invest. There’s a lot of mythology in venture capital.

Tactics we used to build brand awareness early on…

We’re fortunate that there is a significant ‘network effect’ with Portfolia. Once women get started, they understand the value they can bring to entrepreneurial companies and they like that we’ve customized the experience to adjust to their lifestyles. Our members are our biggest marketeers, sharing their experience with friends. We currently have investors from 30+ states and 10 countries. We have multiple grandmother-daughter-granddaughter investing teams, which we really enjoy. We have alumni groups and book clubs where members are all investing.

The entrepreneurs we invest in also invest in our funds. It gives them diversification beyond their own start-ups. Also, many active angels and members of angel groups invest in Porfolia funds — it gives them national diversification while they continue to invest in companies locally. We’re also creating specialty funds on behalf of high-level women’s organizations. We do a lot of speaking engagements and share our stories on social media, but we haven’t spent any money on marketing. Investors are coming to us.

How Portfolia’s strategy has evolved since launching…

Portfolia initially was set up like Angel List, where individuals selected specific startups in which to invest. We had great success early on. The average investment from women was was four times that of the Angel List. But we found they wanted to make one investment, then watch it, and sought a feedback loop. While this is a smart strategy in some areas, it is not successful in angel investing. You need heavy diversification for success — 20 or more companies over 5 years. We could be successful but our platform investors likely would not.

That’s when we went to work to create a new way of investing — one that would provide an engaging and collaborative investing experience, but would also quickly create a diversified ‘portfolia’ in a specific area of interest. Portfolia Funds were born!  In 2016, we invested two funds in 14 companies.

I earned my first paycheck by…

To put myself through school, I was a nanny, a restaurant hostess, and a secretary – sometimes all three simultaneously. At one point, my dentist taught me to be his dental assistant before they were licensed. I learned to be creative and industrious.  Thank goodness I come from a long line of people who don’t require much sleep.

The biggest investing misconceptions…

The biggest misconception women have about entrepreneurial investing is that it’s about spreadsheet analysis – that you have to have an MBA or be a ‘quant jock’ to do it. Nothing could be further from the truth. Early stage investing is about evaluating the team, sizing up a market, understanding competitive forces and buyer motivation, and determining product/market fit. You’re looking for return potential, but at the early stage you don’t find it in extensive analysis of projections. We’re the purchasing agents of the world – most of us have an excellent grounding for early stage investing.

Why it is critical to encourage more women to invest…

  1. To get the companies, products and services we want in the marketplace. 95% of all VCs are men, and they are investing in companies that pique their interest. Areas that are often overlooked: women’s health, birth, menopause, sexual health, breastfeeding, weight, aging, family products and services, and companies led by women.
  2. We can create wealth and the impact we want when we invest. We now own half the investable wealth in the U.S., and this is where wealth and power are created.  We buy 80% of all products and services, consumer and business, and are well-prepared to pick future winners.
  3. Because it’s challenging, engaging, empowering and fun – this is why men have been investing in start-ups for years.

My top 3 pieces of advice for first-time investors…

  1. Start small and learn as you go.
  2. Invest in what you know and diversify across a minimum of 4-6 companies per year.
  3. Invest with friends – it’s more fun and you’re likely to be more successful when you’re viewing it from multiple perspectives.

Characteristics we look for in the companies we select for Portfolia…

Those that are in common for all smart investors: experienced teams, or those with a unique knowledge or perspective; large markets; unique or protectable product or platform; capital efficient; potential for market-level return. And specific to Portfolia, we like to invest where women make markets, across all industries and stages.

The biggest challenge that I see entrepreneurs facing…

Particularly for women entrepreneurs, the greatest challenge is access to capital. The truth is that VCs, and angels to a lessor extent, have a view in mind of what an entrepreneur looks like, their education and background. They only invest in ~5% of the companies they review, and few women can fit that comfort pattern. For years, VCs have said, “In the final analysis, I only invest in entrepreneurs that I would be comfortable having a beer with.” Few of us past that buddy test. Further, there are nuances of pitching and communicating that is outside of women’s natural language.  Male entrepreneurs are more likely to present themselves as hyper-confident, to inflate projections, to use more aggressive language, to counter rather than consider suggestions during meetings; all that can be interpreted as women being ‘weak.’

Advice for entrepreneurs overcoming these challenges…

I’ve really changed my views here. Early on, we spent a lot of time and money figuring out what men did to raise money, then taught those strategies to women. Incidentally, it’s the same process we used to get women into venture capital. I don’t believe in that approach anymore. It creates a cognitive dissonance and an inauthenticity, and even if done effectively, it doesn’t allow us to use our best features. A woman will never be a better male investor than a man. Now, I tell women to find investors that understand them, appreciate their style, lack of hyperbole, their honesty, etc. Fortunately, there are more of us out there investing in women, and men, that are outside of those Silicon Valley caricatures.

What I’ve learned about hiring a great team…

Create something meaningful that others want to be a part of. Hire for passion, expertise and ethics. Honor differences. Set the big vision, let people create and share the rewards.

The best strategies for getting more women in investment organizations…

As an individual investor – just do it!  Don’t overthink it. The most important thing is to get started. For those who want to be investment professionals, join a group with similar views and philosophies to learn the business. Our funds are run by women around the country who are experienced angels, and we train our new investors to step up into leadership roles in our funds as they get more experience.

If you’re looking to get into a traditional venture capital practice, I think your long term goal should be to build your own. Get experience with a brand name VC, but don’t buy into processes or cultures that don’t work for you. One wonderful woman VC said (after many years) that she was ‘coming out of the closet as a woman.’ You don’t need to do that today.

The woman that changed my life…

My high school business teacher, Mrs. Waldine Hand, set me on my life’s business trajectory and gave me the confidence to reach for the stars. We really should reward our teachers the way we do financiers — they add much more to the world.

My ambition is…

Nothing less than connecting women with their financial power globally. We expect to have over 100,000 women investing $15,000 per year in entrepreneurial companies through Portfolia Funds in 5 years. That’s $1.7B annually. It will change the world.